This is the second of a three-part commentary about an issue central to the financial well being of our friends in Nova Scotia approaching retirement age.
Like many Canadians, you probably have investments within a Registered Retirement Savings Plan (RRSP or RRSPs) that you have built up over the years.
Now, as retirement approaches, you may want to start withdrawing that money. What follows is some clarity about the issues involved.
You may access your RRSP savings at any time, but under current tax law you may keep the RRSP money tax sheltered until the end of the year that you turn 71. Once you withdraw any funds from the plan they will be fully taxed. With personal RRSPs you have three choices:
Year-to-date major stock indices have grinded out healthy gains amidst generally tight trading ranges and low volatility (S&P500: +2.4%, TSX: +1.3%, MSCI EAFE: +3.3%). In fact, the equity implied volatility index (better known as VIX) hit a near-10 year low on February 1st at 9.97. The quiet that has fallen over markets stands in stark contrast to the growing uncertainty and unpredictability in the stance of the new U.S. administration on key policy issues such as geopolitical alliances, import tariffs, immigration, tax cuts, infrastructure spending, etc. In particular, political momentum seems to have waned recently as the President’s popularity suffers from recent controversial actions and comments which are weighing on tax reform prospects (a key to market expectations for stronger earnings growth this year and next). As well, investors are contending with rising geopolitical risks in Europe with nationalists, hoping to follow Britain out of the EU, leading in polls heading into elections in the Netherlands (March) and France (April).